Insurance claims: When to file and when to pay out-of-pocket

WASHINGTON – In the aftermath of Sandy, some people are finding damage to their homes.

But if the damage is small, should area residents still file an insurance claim?

Billy Simons, an independent agent with Rust Insurance, says insurance claims should be saved for major damage.

“I think some people get it in their minds that if some of the aluminum siding on the side of their house has come off that they should file a claim. Remember that you’ve got a deductible.”

Simons says severity and frequency can hurt a person filing an insurance claim.

“If you put in several different claims throughout the year at renewal time, your company may not renew your policy,” he says.

“If you have one giant shock loss, they may not renew your policy. You want to be careful that whatever you’re putting a claim in for isn’t below your deductible.”

When the cost to repair the damage is below the deductible or just above it, Simons says it may be better to just pay for the repairs out of pocket.

“Say your deductible is $500 and you have $600 worth of damage, maybe you just pay the $600 and you don’t put a claim in,” he says.

“Some of the damage we’ve seen from Frankenstorm here is trees right through the roof that go into the first or second floor of your home. That’s going to be major surgery on the house. That’s going to take big dollars. That’s when you put a claim in.”